UPDATE: Effective 6 April 2020, psychologists can return to their usual co-payment billing practices except for clients who meet the mandatory bulk billing criteria. Read more about that here, and access a list of the updated MBS factsheets here.

After much speculation about what psychologists might expect in relation to Whole of Community Telehealth, today we have a clearer understanding of what that looks like. The MBS fact sheet, effective today, details these important changes and I imagine many of you have woken this morning to feel more than a little let down. And for good reason.

The changes that were communicated out last night, and effective from today, will certainly have private practice psychologists feeling like they have, at least financially, been thrown under the proverbial bus. While those feelings (and probably the fear that comes with them) are real, it is still possible for your private practice to survive.

We are going to have a quick review here of what the Whole of Community Telehealth changes mean for psychologists and then move on to some of the simple steps and strategies you can implement to survive and even thrive through this time.


What does whole community telehealth actually mean for psychologists?

In a really simple nutshell, it means:

  • Anyone with access to Medicare is eligible for a MHCP
  • MHCP are still made up of only 10 sessions
  • Any MHCP appointment delivered by telehealth must be bulk billed
  • There was no increase in the bulk billing rate for psychologists


What can psychologists do to maintain a viable business?

For most private practice owners this change can represent a lot of downward pressure on profitability. Here are some things to keep in mind to help manage through this:

  • MHCP sessions are still limited to 10, you can bill privately after that at an amount you feel comfortable with
  • You could space out the 10 sessions by charging a full fee session between each bulk billing session
  • You don’t have to work with clients on MHCP
  • You can use this time to expand your work with NDIS, EAP and other client types that yield a better return
  • You can take steps immediately to reduce your practice overheads such as negotiating with you landlord, obtaining business incentive support from the government and talking to your suppliers about reductions or payment terms
  • You can adjust your pay arrangements with your contractors through negotiation and mutual agreement
  • You can adjust your focus to include more non MHCP work such as couples counselling
  • You can expand your services and products to buffer your margin (more on margin management later)
  • You can ramp up your social media and marketing activity to reach your audience, who are now largely stuck at home and are online pretty much all day


A bit about margin management

Profit margin is the difference between what a service costs to deliver and what you charge (or recover) for that service. Usually the simplest way to think about managing margin is that when the amount you recover for a service is forced to drop, in order to maintain the margin, the volume has to increase. This means in order to maintain profit margin in your private practice while seeing a majority of bulk billed clients, you would need to increase the number of sessions conducted.

However, increasing the volume is not the only way to maintain (or even increase) the margin when there is downward pressure on the price you can charge for a service. As mentioned above, you can also combine two other approaches:

  • Reduce the cost of service delivery by lowering your overheads or input costs, and;
  • Change the mix of services you offer by including higher dollar value services


Where to get more information

For psychologists, the most timely and effective delivery of information updates is coming from The Australian Association of Psychologists Inc (AAPi).


If you are not yet set up for telehealth

If you haven’t yet set yourself up on Telehealth, then today is the day. There are plenty of acceptable options for delivery of video-based sessions. The two main ones at the moment are Coviu and Zoom (not the free version), but there are many others that are acceptable.


Build a plan

Today is about taking action, being agile and implementing things that will help your clients and your practice survive. You are still going to need a broader strategy, with longer term objectives and goals to grow your private practice. This is a difficult environment to work in, but with the right support, it is not impossible to navigate successfully.

If you would are looking for more guidance and support, you can reach us here.